CPP maximum pensionable earnings increasing for 2016; Employee benefits continue to be costly: Poll; Ontario WSIB ahead of schedule for eliminating unfunded liability
CPP maximum pensionable earnings increasing for 2016
OTTAWA — The maximum pensionable earnings for the Canada Pension Plan will increase on Jan. 1, 2016, to $54,900 from $53,600, the Canada Revenue Agency (CRA) has announced.
The contribution rate will remain 4.95 per cent for both employers and employees. The basic exemption will remain $3,500. As a result, the maximum employee and employer contributions for 2016 will be $2,544.30, the CRA says.
At press time, Revenu Québec had not yet announced the maximum pensionable earnings that will apply under the Quebec Pension Plan (QPP) in 2016. However, in the past, the maximum has been the same as that for the CPP. The employee and employer QPP contribution rate is expected to increase from 5.25 per cent to 5.325 per cent in 2016.
Employee benefits continue to be costly: Poll
OTTAWA — Employers spend an average of $8,330 a year per full-time employee to provide employment benefits, says a survey by the Conference Board of Canada.
The Benefits Benchmarking 2015 survey shows that despite efforts to contain costs, employer spending on benefits programs for employees represents a significant cost.
The survey found that 52 per cent of organizations have reported increases in benefits costs for active employees, averaging 6.2 per cent between 2013 and 2014.
To manage the costs, the Conference Board says some employers are looking to generic substitutions for prescription medicines or to excluding certain drugs from coverage. Others seek to increase the employee share of premiums.
Employers are also keeping benefit costs lower by limiting certain long-term benefits to employees, for example, retiree benefits. More than half of the employers offer benefits to employees after they retire, primarily covering prescription drugs, vision care, hospital stays, and dental and paramedical care. Between 2012 and 2015, the percentage of employers limiting retiree benefits to "grandfathered" employees doubled among respondents.
The survey also highlighted the following trends:
• More than 90 per cent of employers provide full-time employees vision care coverage (92 per cent); private or semi-private hospital accommodation (96 per cent); out-of-country medical coverage (99 per cent); paramedical services like massage therapy, chiropractic coverage, and physiotherapy (99 per cent); major restorative dental services (98 per cent); accidental death and dismemberment (91 per cent); and long-term disability (99 per cent).
• Most organizations do not have a set annual maximum for prescription drug coverage, but on average, reimbursement is limited to 89 per cent of the claim. Annual maximums are typically in place for dental work.
Ontario WSIB ahead of schedule for eliminating unfunded liability
TORONTO — Ontario’s Workplace Safety and Insurance Board (WSIB) says it expects to eliminate its unfunded liability by 2022, five years earlier than required by law.
The unfunded liability (UFL) is the difference between the WSIB’s future obligations to injured workers and the money it currently has on hand to pay for them.
The change will result in lower premiums for employers and long-term security for workers, WSIB chair Elizabeth Witmer said. She added that average rate reductions of between 10 and 15 per cent for employers are possible over a five-year period, starting in 2017.
"Once the burden of the UFL is gone, employer premiums will consist only of new claims and administrative costs," Witmer said. "That’s an estimated average premium rate of $1.40 to $1.50 instead of the current average $2.46 per $100 of payroll, making Ontario one of the lowest cost jurisdictions in Canada."
The WSIB says it has reduced its unfunded liability by nearly half, from a high of $14.1 billion in 2011 to $7.5 billion in early 2015. Witmer attributes the reduction to a number of changes, including safer workplaces, medical care innovations and helping workers get back to work sooner, as well as rising premium revenue and strong growth in the board’s investment fund.
P.E.I. WCB distributing surplus to employers
CHARLOTTETOWN — The province’s Workers Compensation Board (WCB) is distributing about $13.2 million in excess investment earnings to employers.
The WCB says it is required to be funded between 100 per cent and 110 per cent to cover current and future costs for injured workers, but due to good investment returns, the funded position has grown to 125 per cent. The board says distributing the surplus among employers is a way to quickly return to the required funded range without creating volatility in employer rates.
The amount the board will distribute to an individual employer will be based on 2014 assessments. The WCB says it will send cheques for the surplus amount to employers who reported 2014 actual payroll to the board and whose account is not in arrears.
Average weekly earnings down in August: StatsCan
OTTAWA — Average weekly earnings of non-farm payroll employees were $947 in August, down from $954 in July, Statistics Canada reports. Statistics Canada revised the July numbers from the previously reported $957.
On a year-over-year basis, weekly earnings increased 0.8 per cent in August. The increase in weekly earnings during the 12 months to August reflected a number of factors, including wage growth, changes in the composition of employment by industry, occupation and level of job experience, as well as average hours worked per week. Non-farm payroll employees worked an average of 32.8 hours a week in August, down from 33.1 hours in July and from the August 2014 average of 33 hours.
Year-over-year earnings of non-farm payroll employees increased in five provinces in August, including New Brunswick, Nova Scotia, Ontario, Prince Edward Island and Quebec. They declined in Alberta and Saskatchewan and were virtually unchanged in British Columbia, Manitoba and Newfoundland and Labrador.
Unemployment rate drops in October: StatsCan
OTTAWA — Canada’s economy gained about 44,000 jobs in October, lowering the country’s unemployment rate from 7.1 per cent to seven per cent, Statistics Canada reports.
Employment was up in both the private and public sectors. Compared with 12 months earlier, employment across the country was up by 143,000, with all the gains in full-time work.
Industries where employment increased included public administration, wholesale and retail trade, as well as accommodation and food services. Employment was down in industries such as other services, natural resources, and information, culture and recreation.
On a provincial basis, Newfoundland and Labrador continued to have the highest unemployment rate at 13 per cent, down from 13.6 per cent in the previous month. The unemployment rate also went down in Nova Scotia (from 8.9 per cent to 7.8 per cent) and Ontario (from 6.9 per cent to 6.8 per cent).
Manitoba had the lowest unemployment rate at 5.3 per cent, but it was up slightly from 5.2 per cent in September.
The unemployment rate also went up in Alberta (from 6.5 per cent to 6.6 per cent), New Brunswick (from 8.8 per cent to nine per cent), Prince Edward Island (from 9.3 per cent to 9.9 per cent) and Saskatchewan (from 5.1 per cent to 5.6 per cent)
The unemployment rate was unchanged in British Columbia (6.3 per cent) and Quebec (7.7 per cent).